Chapter 1 - Define Management Consultancy

Question 1

What are the opposing perspectives on management consultancy?

Answer 1

Functionalist perspective

Critical perspective

Question 2

Explain the functionalist perspective on management consultancy.

Answer 2

Create value for their clients by advising managers on how to improve the functions in their organisations.

Question 3

Explain the critical perspective.

Answer 3

Critical of the knowledge, techniques and results of management consultants.

Question 4

List the characteristics of management consultants?

Answer 4

Service 
 Direct at managers 
 Is about decisions 
 It is knowledge intensive labour 
 Independence 
 Is a business 
 FT or PT

Question 5

Management Consultancy as a service.

Answer 5

A service is intangible and hard to measure
Some consultancy projects are measurable such as cost reductions
The only tangible outputs are reports and PowerPoints

Question 6

What is a contingent project?

Answer 6

Where the fee for the service are directly related to the achieved results

Question 7

Can management consultancy be scaled up?

Answer 7

Management consultancy is very labour intensive but with the use of software labour can be saved and a high quality service is still provided

Question 8

Why is Management consultancy is directed at managers.

Answer 8

Managers are responsible for organising their relevant department or teams and they distribute the advice received from management consultants

Question 9

Management consultancy is about decisions.

Answer 9

Management is about decisions regarding business effectiveness.

Question 10

Management consultancy is knowledge intensive

Answer 10

To solve business problems requires intellectual capacity

Question 11

Management consultancy is about independence

Answer 11

Management consultants are independent from their clients in order to provide impartial advice.

Question 12

Management consultancy is a business.

Answer 12

A management consultant is a business transaction between the client and the consultant.

Question 13

Management consultancy is about projects

Answer 13

Consultants are demanded for a limited period of time
Consultants have to provide particular deliverables
Projects are temporary however relationships are long-term as repeat business and good reference is important for consultants

Question 14

What type of clients are consultants main clients?

Answer 14

Repeat business/existing clients

This saves search costs for clients

Question 15

Is there one definition for management consulting?

Answer 15

There is no consensus around the definition for management consulting

Question 16

What is the synthesized definition of management consulting?

Answer 16

To provide assistance to managers (e.g. identify problems and opportunities)
To outline solutions to problems and opportunities

Question 17

What is the difference between strategic and operational level decisions?

Answer 17

Strategic level - improving long-term performance of the client organisation as a whole (whole business environment)
Operational level - improving the performance of operational activities over a shorter term

Question 18

What is a narrow definition of management consulting?

Answer 18

Management consultants give advice to their clients

Question 19

What is the broader definition?

Answer 19

Next step after giving advice is to implement the solution
A broader definitions includes advice giving and implementation
Providing assistance with the management’s task of implementation

Question 20

What is the difference between management consultancy and business consultancy?

Answer 20

Management consultancy has the narrow and broad definition

Business consultancy - advice to management on non-management tasks of implementing management decisions

Question 21

What is business consultancy

Answer 21

It is helping the processes within a department or team

Assisting on non-managerial tasks

Question 22

What is the difference between consultancy and business services?

Answer 22

Business service involves no advice
Consultancy involves advice to managers and to implementation
And advice to non-managerial tasks on implementation
Key difference is advice

Question 23

What is the criteria for the management consultancy definition?

Answer 23

Advice on management decisions
Decision on business problem
Assistance with management on implementation tasks
Independent of client management

Question 24

What are the formal roles of management consultants?

Answer 24

Expert
Doctor
Facilitator

Question 25

What are the informal roles of management consultants?

Answer 25

Hired hand
Legitimator
Political weapon
Scapegoat

Question 26

Management consultant as experts.

Answer 26

Clients know or think they know the opportunity or problem

They purchase the expertise from the consultant to help assist the decision process

Question 27

What is knowledge brokering?

Answer 27

Consultants broker knowledge from best practice
Within an industry - from industry best practice to less established firm
Across industry - may take best practice or business model in one industry and apply it to another industry

Question 28

Is there a conflict of interest with knowledge brokering? How can you prevent this?

Answer 28

Yes you could give away a competitive strategy
Consultants set up “Chinese walls” to prevent the leak of sensitive information
Policy of having one client per industry

Question 29

Consultants as doctors?

Answer 29

Clients think they have a problem or opportunity but only have a vague idea of what it might be
Diagnose and solve the clients problems

Question 30

What is the faciliatory role? How is it different?

Answer 30

Doctor and expert are forms of content consultation

Facilitator helps the client do it themselves it is a process consultation

Question 31

Hired hands.

Answer 31

Client is understaffed and needs some assistance with management decisions
Not necessarily a problem or opportunity

Question 32

Legitimators.

Answer 32

Give legitimacy (rubber stamp) a solution
Clients may need a legitimator if some stakeholders are unhappy about a future plan
Acceptance of a plan can be increased by the hiring of prestigious consultants

Question 33

Political weapons.

Answer 33

May provide arguments or case to be used for internal (factions/departments etc) or external (governments, firms etc) agents.

Question 34

Scapegoats.

Answer 34

A company may want to make an unpopular decision (lay off workers) but do not want to deal with the backlash
The hire consultants to do their dirty work and keep their hands clean
The management consultants are seen to take most of the blame
Similar to footballers and transfer requests (they want it to seem that the player wants out)

Question 35

Should management consultants accept informal roles?

Answer 35

It is tempting to accept informal roles but this could lead to a vicious circle
Accepting informal roles could lead to reputational damage leading to less formal roles
With no formal roles clients your formal reputation is damaged and clients do not want to accept you even for informal roles

Question 36

What are the divisions of responsibility for a consultant? What can this responsibilities tell us about a consultant?

Answer 36

1. Identify the problem (opportunity)
2. Diagnose
3. Develop one or more solutions
4. Making a decision
5. Implementing a decision

Tells you the role the consultant will play

Question 37

Management substitute.

Answer 37

Management consultants take on al 5 sub-processes of responsibility

Question 38

Bogus consultancy.

Answer 38

The client takes all the responsibilities and does not let the management consultant have any sub-processes

Question 39

How to external and internal consultants differ?

Answer 39

Knowledge
Relation to client
Reputation
Cost

Question 40

Characteristics of a profession?

Answer 40

The business activity is accompanied by formal, legally enforced institution that protects the interests of the public and the professionals involved
Designs qualification standards
Monitors and controls the activities of members when necessary taking sanctions

Question 41

Key components of a profession?

Answer 41

Accepted authoritative body of knowledge and skills

Code of conduct

Question 42

What are the advantages of professional standards?

Answer 42

Layer of accountability
Protect clients against consultants
Reduce uncertainty for clients

Question 43

How are clients’ interests protected?

Answer 43

Unlike doctors or lawyers there is no legal protection against bad consultancy
Instead a clients reputation is the single most important aspect

Question 44

Why is management consultancy not a legally enforced profession?

Answer 44

Evaluation difficulties - Difficulty in assessing the cause effect relationship (Almost impossible to evaluate)
Domain ambiguity - the body of knowledge for management consultants is so diffuse that common standards of knowledge are difficult
Diverging interests - form of market failure if standards subject above and below average consultants to same standards. Top consultancies do not need public standards as they have a free market private standard that gives them legitimacy (e.g. their brand and reputation)